Cabinet Approves Revised Electricity Pricing Policy for Public Comment

Posted 18 August 2026 Written by Acts Online
Category Energy & Electricity

Brought to you by SAnews: Cabinet has approved the draft Revised Electricity Pricing Policy for public comment, replacing the 2008 framework to align national tariff setting with structural reforms under the Electricity Regulation Amendment Act, 2024.

The revised policy sets binding principles for transparent, cost-reflective tariff determination by the National Energy Regulator of South Africa (NERSA), Eskom, and licensed municipal distributors within an unbundled, competitive electricity market.

Key Regulatory and Tariff Reforms

  • 10-Year Price Forecast: NERSA will be required to publish a multi-year price trajectory spanning 10 years to provide price certainty for energy-intensive industrial planning and capital investment.
  • Bilateral Off-Take and Wholesale Market Rules: Establishes pricing and wheeling rules for direct bilateral Power Purchase Agreements (PPAs) between independent power producers (IPPs) and commercial/industrial off-takers outside Eskom’s single-buyer model.
  • Exclusion of Bad Debt from Base Tariffs: Prohibits the practice of factoring uncollected municipal consumer debt (historically 1% to 2.5% of tariffs) into the cost-of-supply tariff calculations passed on to paying consumers.
  • Expanded Negotiated Pricing Agreements (NPAs): Broadens NPA qualification beyond financially distressed heavy users to include non-distressed industrial consumers in strategic priority sectors that commit to investment and employment targets.
  • Centralised Indigent Register: Automates Free Basic Electricity (FBE) administration by integrating municipal indigent lists with national social grant and Department of Home Affairs databases.

What this means for you, your business, or your clients

  • For yourself: No direct individual regulatory filing obligations; indigent verification will migrate to automated national database cross-referencing.
  • For your business: Commercial operations must review electricity budget forecasts against the forthcoming NERSA 10-year price path once gazetted.
  • For your clients: Industrial and heavy-user clients should evaluate eligibility for expanded Negotiated Pricing Agreements and assess the tariff implications for private bilateral PPAs.

Originally published at https://www.sanews.gov.za/south-africa/government-outlines-plan-lower-electricity-costs

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